MR. McCLELLAN: All right, good afternoon for round two. I'm pleased to be joined by General Strock of the Army Corps of Engineers. The President
just participated in a briefing on the Katrina recovery and rebuilding
efforts along the Gulf Coast region, and he heard from Secretary Chertoff
on the debris removal efforts and the housing situation, as well as hearing
from General Strock on the levee system and where we are. And he also
heard from our federal coordinator, Don Powell, in terms of where we are on the longer-term recovery and rebuilding efforts in the region.

The President was very interested in hearing about where we are in terms of
restoring the protection for our levee system ahead of next hurricane
season, as well as where we are headed in terms of building that levee
system better and stronger than before.

And with that, I'll just turn it over to General Strock and he'll give you
an update that he gave to the President, as well. Thanks.

LIEUTENANT GENERAL STROCK: Good afternoon. As Mr. McClellan said, I'm
Lieutenant General Carl Strock, and I'm the Chief of Engineers. As the
President is going down to New Orleans this week, he wanted to get an
update on where we are with restoration of the flood protection systems
around the city. So what I'd like to do here today is just share with you
what I shared with the President. I'd also like to address a couple of
concerns that were raised this morning in the media about the quality of
construction of the levees and potential vulnerabilities that exist as a
result of the stress that was put on the system during Katrina.

In terms of damage to the system, I think you're all pretty familiar with
the area down there, but there are about 350 miles of levee. And in the
event, 169 miles were damaged or destroyed; 34 of the 71 pump stations in
the city of New Orleans were also damaged in this event. So to date, we
have restored about 100 of those 169 miles of levee, or about 45 percent of
the levees have been restored to their pre-Katrina and authorized levels.
About 85 percent of the pumping capacity has been restored to pre-Katrina.

And in the process of that, we've let almost 60 contracts; 91 percent of
those have gone to local firms, for about $770 million worth of work. So
we see this not only as a way to help set the conditions for the physical
recovery of New Orleans, but also to help create some economic
opportunities for local businesses.

In terms of objectives, we're well on track to meet our 1 June commitment
to have the flood protection system around New Orleans equal to or better
than it was prior to Katrina. We will have all damaged levees and flood
walls restored, and we will have it enhanced in the sense that we will put
three temporary closures on the canals that presented problems during
Katrina. And those are shown up here -- the Canal at 17th Street, the
Canal at Orleans, and the London Avenue Canal -- all of those will have
closures so it will prevent the storm surge of a future event from getting
into those what we think are vulnerable areas.

By September of '07, about a year later, we will have the entire flood
protection system around the New Orleans area up to its full and authorized
design levels. And I say that and make that distinction because
pre-Katrina, some of the system was not at its full authorized design, so
we'll complete the construction of that.

There are about five hurricane protection and flood protection systems in
the New Orleans area. We've been focused on that up here in Lake
Pontchartrain, but there's also a west bank and vicinity project here;
there's a New Orleans to Venice project; there's a Larose to Golden Meadow;
there's a Grand Aisle. There are a number of flood protection systems that
we have now been authorized and have funding for to complete those by
September of '07.

We also, by December of '07, will have concluded our study on what it will
take to give the ultimate protection to New Orleans. It's been called a
Category 5 protection level. We'll determine what the appropriate level --
make a recommendation on what that should be. But that study should be
concluded by December of '07, and we'll have a good sense of where we need
to go in the future.

I'd also like to briefly mention the fact that before Congress today, the
President has a supplemental request for about $1.5 billion in enhancements
to the system, which will be put into place if Congress approves and
authorizes in the next four or five years. And these include permanent
closures of the outfall gates, where the temporary ones now will not have
the full capacity to handle the pumping out of the city, but these
permanent ones will.

We are looking at navigable flood control structures that will isolate the
Inner Harbor -- the area that overtopped and caused all the damage in the
9th Ward -- we will isolate that through a couple of navigation gates that
will close in the event of storm surges. We will armor certain portions of
the levee as are appropriate.

We will also storm-proof the pumping stations. We'll raise the electrical
works up above flood level so they can operate during periods of flood.
They're currently not designed to do that because the assumption was, if
the levees would hold, and these pump stations are mainly there to pump
rain water out of the city. We will also incorporate certain segments of
the non-federal levees into the federal system, particularly down in
Plaquemines Parish. And finally, we will do about $100 million of
investment in the wetlands to try to stabilize some of the wetlands lost
down there, which provide some protection against a storm surge and serves
as a buffer against these hurricanes.

In addition to this work, we have our ongoing interagency performance
evaluation team that is looking into the causes of the levee failure so
that we can learn from those and incorporate those into our work. And that
team is on the verge of producing a second report later this week, which
will give us some indications of where we need to go.

Now, to take on some of the allegations in the press this morning about
standards of construction, quality of materials, and then the remaining
vulnerabilities, I'd just like to make the statement that we are using the
right kind of materials. There's no question about that; we are using the
right material and we're putting it down in the right way. We're giving
tremendous scrutiny into not only how we do this, but also into the results
after the fact. So we're doing extensive testing of the in-place
structures to ensure that they are up to standard.

There was concern raised about the vulnerability of the system, and it's
mainly associated with the flood walls that are in the vicinity of New
Orleans. We have 28 miles of flood walls in this 350-mile system. About
11 miles of that flood wall is inside those canals that were breached
during the last event, so we're going to take those out of the equation by
closing down those canals. But there are flood walls remaining. About 80
percent of those flood walls are what we call I-walls. These are walls on
top of levees founded on sheetpile walls that serve both as a cutoff and as
structural support. And about 20 percent are T-walls, which are more
robust, stronger flood walls, that are founded on the same sheetwall, but
have pile foundations that support them and give them added stability. And
they also have a spread-footer base which gives it much more structural
stability.

Over time I think we'll be replacing these I-walls with T-walls in most
parts of the system, and we're in the process now of determining that. The
question really is, of the I-walls that were not destroyed in the event,
are they structurally stable? We are in the process now of doing those
evaluations, and we'll have a 100-percent review of those I-walls. And
where there are risk and vulnerabilities, we'll make sure we communicate
the level of risk to those people behind those walls so they can make the
right kind of decisions. And we'll also take what action we can take to
stabilize those walls if we feel like that's feasible to do in the time
between now and the hurricane season.

Let me close by just expressing again our commitment to the safety of the
people of New Orleans. It is a two-step effort. General Bob Crear, who
commands the Mississippi Valley Division, announced early after the event
that we were at D-plus whatever day it was, and he did that so that our
people would understand the urgency that so many days have passed since the
event and we've got to do all we can to help people recover from that
event. So we've been tracking D-Day as we're moving ahead to make sure
we're doing things as quickly and as effectively as we can.

About two weeks ago, General Crear announced it is now H minus 100 -- and
what does that mean? It means it's 100 days before the next hurricane
season starts on the 1st of June. So in addition to working very hard to
help the people recover from the last event, we're also now focused on
preparation for the potential for the next hurricane to strike the city.
So the people of the Corps of Engineers and our partners down there in the
area are working very hard to ensure that we reduce the vulnerabilities to
the people to the very highest degree we can, and that any remaining
vulnerabilities are clearly understood by the people as they make decisions
on when and how to reoccupy the city.

With that, I'll be happy to take any questions you have.

Q You're saying that your system should prevent waters from getting into
vulnerable areas. And as you're saying that, city officials still have not
determined whether they're going to rebuild in the low-lying areas, or just
take everything to the higher elevations. Do you feel that what you're
doing with the levee system will, indeed, allow people to go back into the
low-lying areas, to be safe and comfortable there, versus moving into the
higher elevations?

LIEUTENANT GENERAL STROCK: It depends on what part of the system you're
talking about. This 350 miles of levee has about 13 different cells. And
if we are to have another Katrina-like event, I think I can say with a high
level of confidence, you wouldn't see the catastrophic flooding that we saw
in the first event, which resulted from the failure of these flood walls,
because we have taken them out of the equation now.

You would see overtopping, though, of levees. You would see flooding in
low-lying areas -- for a couple of reasons. One is, the storm surge
associated with Katrina simply was higher than what the levees were
designed against. So you will see overtopping of the levees and some water
in the city. We're working with the city to help them understand where we
see -- what areas of the city we see as most vulnerable.

The second is, that as we close off those canals, we will impede the city's
ability to move the rainwater out of the system, so you may have areas of
flooding due to internal drainage problems that result from the fact that
as we rebuild the -- as we close these canals, we're putting interim
structures in right now with smaller capacity pump stations here.

At the head of these canals, you have very large capacity pump stations.
So for example, 17th Street has about a 10,500-gallon -- cubic feet per
second rate of capacity. The pumps we'll put in here will have about 3,000
cubic feet per second. So the city won't be able to pump as much water
into these canals as they normally would. So that will cause some interior
flooding as a result of rainwater, potentially.

Q So to follow up, so what you're saying is, no matter what, there will
still be some flooding in low-lying areas? And with your expertise, then,
what that statement said, are you suggesting or recommending that there
will be no more building in the lower levels and just higher elevations?

LIEUTENANT GENERAL STROCK: No, those decisions are local decisions. We
simply try to present to the locals the areas of risk and what could occur
in the various scenarios. So then it's up to them to decide what to do.
And then we'll support that in any way we can.

Q General Strock, can you make it clear this -- the reduction in pumping
capacity of these pumping stations, are they all going to be reduced to a
third of what they were before? I don't understand the reasoning for that.
Or is it just this particular one?

LIEUTENANT GENERAL STROCK: It is -- it's just that particular one. I gave
you the worst case. The others are similar. Each of these canals will
have a capacity of around 3,000 -- it's about 2,600, I think is the
specific number -- when we close these structures. And that really has to
do with our ability to, in this short of time, to get the massive pumping
capacity in there in that short of time. So it's about the best we can do.

Q -- in the future, though?

LIEUTENANT GENERAL STROCK: Oh yes, absolutely. In the future, one of
those enhancements, when we go to a permanent solution, will be to replace
those interim structures with pump stations that have increased -- actually
increase capacity over what's there now. So in four or five years, we will
be able to handle this, no problem at all.

Now, this is not an insurmountable problem. In fact, the President of
Jefferson Parish has already approached us and suggested ways that, with
some assistance, they could mitigate this problem by moving the water
elsewhere and not into the 17th Street canal.

You asked about the other canals. One canal has a current pumping capacity
of about 4,200 cubic feet per second, and this will be 2,600. And the
other is about the same. It's about 2,600 and 2,200, I think. So the most
significant problem will be in the 17th Street Canal.

Q In the Katrina event, there was a lot of question about whether there
was overtopping or a breach, and there's been a lot of discussion about
when it was determined that it had actually been breached. Is there
anything in the way these will be rebuilt that -- in terms of the greater
technology available today, or in how people are trained, that would make
it easier to discern if it was overtopping or a breach in a future problem?

LIEUTENANT GENERAL STROCK: We face a couple of problems there. First of
all, the city was evacuated, so there weren't many witnesses around who
could really tell us what went on. And we see a wide variance of people
and what they think they saw and what apparently actually happened.

The other is the -- is sensors that we have to monitor the impacts of these
storms. Most of those sensors were destroyed due to the magnitude of this
event. So we don't have a good scientific record of what actually
occurred. We have pieced that record back together in our -- our
performance evaluation team. One of their charters was to describe the
storm that struck this structure, and then the other was to describe the
structures that were in place, and then to judge whether or not they were
properly designed to handle that level of storm.

There were areas that were overtopped. Clearly, the levees up in St.
Bernard, which were earthen levees, were clearly overtopped -- these levees
out here. And these were -- the surge coming in off of Lake Borne. So
those were clearly overtopped.

The Inner Harbor was also overtopped, and this was a -- because of very
high levels of surge that resulted from waters coming in off of Lake Borne
through the Gulf Intercoastal Waterway, and the Mississippi River Gulf
Outlet, and then up through Lake Pontchartrain. So we have very high
levels here, and clearly, the inner harbor flood walls were overtopped.
The flood walls in the canals, though, were not overtopped and failed
through a different mechanism.

Q Sir, what was the President's reaction to your report? Was he
satisfied with the timetable and the progress? Or did he raise any
concerns?

LIEUTENANT GENERAL STROCK: He did not express satisfaction or concern. He
expressed appreciation for what we're doing, that he -- we are meeting the
commitments he made to make it equal to or better than it was pre-Katrina
by the 1st of June, and then ultimate, to make a better and stronger
system. He expressed confidence that we're doing that. So I think that he
is comfortable with where we are.

Q The studies, as I understand it that you're reacting to, one of the
things that they were talking about were the sands that were brought in to
rebuild the sections of breached levees, and that they did not feel -- I
understand you're saying you are convinced that that's adequate. They
don't think so. Do they not see the right things? Are you disagreeing
over the nature of what was actually put down?

LIEUTENANT GENERAL STROCK: We have not spoken with them directly about
their finding, which is one of our frustrations. We don't know exactly
where they took the samples, and we haven't seen the results of the lab.
So we would -- we're asking them to provide that to us.

Anecdotally, I was told that some who escorted some of these people out
there took samples of areas of soil that had been rejected for
incorporation into the levees. So if you took the wrong soil, then you'll
reach wrong conclusions. We're actually importing a great quantity of
material from Mississippi because there are not suitable soils sufficient
in the area, so we are trucking clays in from Mississippi that meet our
standards and specifications. So I'm looking forward to having that
discussion with those who have reached these conclusions because, clearly,
no one wants to know better -- more than we do about any quality concerns
that people might have about these levees.

Q But you've been testing what you've been putting down and you're
satisfied with the --

LIEUTENANT GENERAL STROCK: Yes. Yes.

Q Can you talk about the 28 miles of flood walls? You said that 80
percent of them are these I-walls, which are not as structurally sound as
the T-walls. And the question is, those that aren't destroyed, are they
stable? When will you determine whether or not they're stable, and how
risky is that going to be to the citizens in the coming hurricane season if
they are not?

LIEUTENANT GENERAL STROCK: Well, I don't have a specific time line on when
we're doing that. The process is ongoing right now. Certainly, we must do
that by the beginning of next hurricane season when people face decisions.
That's when they really must know what level of vulnerability there is. I
don't know the specifics on when we're getting back. That process is
ongoing now.

Part of that process is informed by the results of our evaluation team. As
I mentioned, later this week we're sitting down with the American Society
of Civil Engineers to share with them the conclusions we've drawn, and some
of those conclusions have to do with the performance of these I-walls. So
we are right at the process of really, we think, understanding what
occurred there. So understanding what occurred in the failed sections will
allow us then to go and look for similar indicators on those sections that
did not fail.

So the true understanding of what occurred, if the American Society of
Civil Engineers validates our findings, is just beginning to come forward
now. And until we really understand that, we can't make the right kind of
calls on the remaining flood walls.

But I can tell you that the areas where those flood walls are I think are
relatively safe. Eleven miles of those flood walls are here. There's a
section on Jefferson Parish which is significant -- we don't see that that
would be directly impacted. And then there appear to be small sections of
I-wall that are where the flood -- where the pumping stations are. So
we'll take each one of those and analyze them as discrete elements of the
system and ensure that the local people understand the vulnerabilities.